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Douglas, AZ 85607

$175,000B-

9 bd · 3.9 ba · 3,216 sqft · Built 1910 · MultiFamily · Pending · 1105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,835/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$292
• HOA: −$0
• Vac / Maint / Mgmt: −$595
• Net cashflow: $1,030/mo
• Annual: $12,363/yr
• Cap rate: 13.36%
• Cash-on-cash: 25.23%
• DSCR: 2.12
• 1% rule: 1.62%
• Cash to close: $49,000

Investor read

• This is a 3 × 3-bed/1.3-bath units multifamily listed at $175k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive. Per door: $343/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $175k).
• It's been on market 1105 days — a 12% lower offer ($154k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $154k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#39 in AZ) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A; Watch: amenities D-, commute F, employment F.
• Douglas Unified District (4174) (town): math 9% / reading 24% proficiency, ranked #209 of 249 in AZ (top 84%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Sarah Marley School (math 2% / reading 12%, grade F, #1,064 of 1,109 statewide, top 97%, 313 students, 86% FRL); Ray Borane Middle School (math 5% / reading 17%, grade F, #183 of 218 statewide, top 85%, 387 students, 92% FRL); Douglas High School (math 14% / reading 28%, grade F, #220 of 381 statewide, top 58%, 1,405 students, 83% FRL).
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 163 active listings in the ZIP; 437 units permitted in Cochise County in 2024 (6 in 5+ unit buildings).
• Cochise County population projected at -30% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 5y ago; this cycle's ask has dropped $64k (27%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 5→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.4% vs local median 4.3% in Douglas — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 1105 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.